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On 8th Iranian Steel Market Conference

Soltaninejad Announced: IME’s 5 New Solutions to Trade Steel Products on a Modern Market

CEO of Iran Mercantile Exchange stated that development of a modern market to trade steel products is applicable through IME’s financial instruments including “commodity funds (ETCs)”, “long-term contracts”, “debt securities”, “reverse auction (RA) board” and “barter market”.
Soltaninejad Announced: IME’s 5 New Solutions to Trade Steel Products on a Modern Market

According to the report by the IME’s International Affairs and PR, Hamed Soltaninejad on the 8th Iranian Steel Market Conference referred to the development of steel market on the IME and stated that functionalities of IME in national economy include trade facilitation, hedging, financing, lowering trade costs, increasing transparency, market regulation, fair price discovery and increasing liquidity.

On his lecture he pointed to IME’s financial instruments and said the most important tools applied on IME include: cash, credit and forward contract, standard parallel SALAM contracts, futures and options contracts, CDRs, debt securities, commodity funds, long-term contracts, reverse auction (RA) board and barter market.

A Glance at Iron Ore and Steel in World Commodity Exchanges

CEO of IME pointed to the status of iron ore and steel in world commodity exchanges and added that iron ore futures of Dalian Commodity Exchange with a trade volume of 600 million contracts (100 tons per lot) and steel futures of Shanghai Futures Exchange with a trade volume of 700 million contracts (10 tons per lot) accounted for largest traded metal contracts among the Asian and world commodity futures markets last year. However, the limited access of the international community to these exchanges has made it impossible for foreign participants to properly benefit from the risk hedging services of these markets.

Although the steel futures trading at LME in 2017 was about 6-fold compared to last year, a total of about 400,000 contracts (10 tons per lot) were traded on scrap and rebar futures, which is very small compared to China’s exchange. LME suspended steel billet futures in 2017 and has not yet reached a sustainable level and status in ferrous metals.

Steel futures contracts of NYMEX with a trade volume of about 63,000 contracts (20 tons per lot) and iron ore futures of CME with a trade volume of about 90,000 contracts (500 tons per lot) in 2017 did not have much success. (CME iron ore trade volume has almost halved since last year.)

Iran Mercantile Exchange in 2017

On this conference, Soltaninejad referred to the IME’s trade statistics on 2017 and said that the value of IME’s financial market in 2017 was about 17.9 billion USD comprising 57% of IME’s total transactions. The value of IME’s spot market in 2017 was about 13.5 billion USD comprising 43% of IME’s total transactions.

Soltaninejad added that $7,003 million, equivalent to 52 percent of the IME’s total trade value is related to petrochemical products, and $5,489 million, or 41 percent to industrial and mineral products, $875 million equivalent to 6 percent to agricultural products, and $86 million, equivalent to one percent to the side market of IME.

He stated that the trade statistics of metal and mineral products on IME in 2017 shows that steel with a value of $4,214 million, equivalent to 77%, occupies the highest transaction value, and the following commodities come next in order: copper with value of $892 million equivalent to 16%, aluminum with $238 million equivalent to 4 percent, iron ore with $48 million equivalent to one percent. The value of other commodities traded on this group includes: concentrates with value of $28 million, gold with $12 million, zinc and coke each $3 million, and sponge iron with $1 million.

IME’s Solutions to Balance Steel Production Chain

CEO of IME highlighted new solutions to balance the steel production chain and said that improper pricing, contract restructuring and price volatilities have led to imbalance in steel production chain and in order to balance this process we should move towards integrated, transparent and modern markets so that development of a modern market to trade steel products is applicable through IME’s financial instruments including “commodity funds (ETCs)”, “long-term contracts”, “debt securities”, “reverse auction (RA) board” and “barter market”.

Author: International Affairs and PR

ID: 50059069

Published on: Thursday, February 1, 2018 17:00

Source: IME

View count: 20

Sunday, February 18, 2018 21:47

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